Buffalo Wild Wings responded on Wednesday to Marcato Capital Management's letter calling for the restaurant chain to make substantial changes to its executive ranks and board.
"We welcome communications with our shareholders and we value constructive input toward the goal of enhancing shareholder value," said Buffalo Wild Wings. The company said that it will "carefully consider" the recommendations put forth in Marcato's letter.
The activist hedge fund said the casual restaurant chain's stock price could nearly triple if it improves its business, according to a filing on Wednesday.
Marcato founder Mick McGuire said in a letter to the chairman of the company's board that he was "exceedingly optimistic" about the company's future but warned that "substantial changes" were essential for its success.
The company needs "the introduction of fresh talent at both the Board and management levels," McGuire wrote, adding it must improve its experience and sophistication in areas of restaurant operations, franchise system development, corporate finance, and capital markets."
Buffalo Wild Wing's share price has dropped 17.6 percent in the last 52 weeks to $161.33 at Tuesday's close, far short of the $458 Marcato said the company would be worth if it follows Marcato's plan to shift toward a more highly franchised model.
The stock price jumped nearly 3 percent after the filing was released.
Marcato, which owns 5.2 percent of the company and is its fourth biggest investor, has told executives in private that capital isn't being used wisely by concentrating on buying out franchisees and opening more units.